Local Government Center official faces pointed questions, protesters in North Hampton

By TIM BUCKLANDNew Hampshire Union Leader

NORTH HAMPTON - The town Select Board received few immediate answers when it asked Local Government Center interim Executive Director George Bald pointed questions at Monday's meeting about how the public insurance administrator plans to comply with a state order to return more than $17 million to taxpayers.

Bald has said he has set up meetings with banks in an effort to come up with the money, which is due Dec. 1 and would repay funds taken from 2000 through 2011 from members of LGC's health insurance pool and used to subsidize the workers' compensation program.

"I'm hoping you're going to have some magic wand to wave over this," board Vice Chairman Phillip Wilson said. "I can't see how anybody is going to lend money to LGC to pay off $17 million of debt, essentially, that is due for a lack of collecting adequate premiums to pay claims from years ago. I'm baffled by this."

Wilson read from a state law, RSA 281-a, which says participants in self-funded workers' compensation programs "shall appropriate such funds as are necessary" to meet obligations.

"Why don't you just go back and assess those participating members?" Wilson said.

LGC officials have steadfastly maintained they will not do so, saying RSA 281-a does not apply to the Secretary of State order because the order calls for the Property and Liability Trust, which is the workers' compensation program's parent entity, to repay the money.

David Frydman, LGC's legal counsel, has opined that the order is under the auspices of another state law, RSA 5-b, which says that political subdivisions shall be liable "to any third party for the acts or omissions of the pooled risk management program."

"I know you've got a legal opinion by the current in-house attorney, but it strikes me as seriously flawed," Wilson said.

"Well, Mister Wilson, that's your opinion of the situation," Bald said. He said that, when faced with difficult challenges, "I've always believed there's a route out of it. It may not always be clear and it may not always be a straight line, and most times it's torturous, but I do believe we'll find a solution."

Bald said he believed that assessing workers' compensation members to repay the order would be "very, very painful" for those communities, but he said he couldn't provide the Select Board with any specific proposal to pay the money back.

"Should any community be penalized for a bad management decision?" Bald said. "I'm not saying what particular course I'll take because I need to be able to recommend to the board maybe more than one route."

"You use the word 'penalize.' It's not penalizing them. These are the communities that enjoyed the benefit of that $17 million, but they didn't pay for it," Wilson said. "You've already penalized the other communities."

"And you'll get back to us by when to tell us how you're going to solve this?" he said.

"August," Bald said.

LGC has appealed the order to the state Supreme Court. The order also calls for, among other things, repaying $33 million in surplus funds to members of HealthTrust, its health insurance pool, and about $3 million in surplus funds from its Property and Liability Trust.

David Lang, president of Professional Fire Fighters of New Hampshire, who waged a 10-year battle with LGC to force it to open up its operations, attended Monday's meeting and organized a picket of demonstrators calling for the return of money.

"I was impressed with the amount of quality knowledge the selectmen knew about the LGC and on the other side, I was disappointed at the lack of responsiveness of the LGC executive director, Mister Bald," Lang said.

At other points in the meeting, Bald also reviewed his efforts to reorganize LGC to comply with the order and said he'd accomplished his goal of making LGC more transparent to the public.

After Bald left, Wilson and board Chairman Jim Maggiore said they were satisfied with Bald's willingness to answer questions and provide them answers at a later date.

"What I'm hearing here is this willingness to find a solution," Maggiore said.